Real Property Law & Taxation

Buying of real estate property in the Philippines include finding a property, negotiating the terms of sale with the seller, conducting of due diligence, drafting and signing of the contracts, paying the taxes and registering the property under your name.

A contract to sell is merely a conditional agreement where the seller agrees to transfer ownership to the buyer once certain conditions (e.g. full payment of the property) are met. On the other hand, a deed of absolute sale is a document that transfers ownership of the property to the buyer without any conditions.

Taxes involved include the Capital Gains Tax, and in some cases, Value Added Tax, Documentary Stamp Tax, Transfer Taxes and registration fees.

A lawyer is necessary in property transactions in order for your rights to be properly guarded as a lawyer shall assist in the negotiation, the drafting and reviewing of contracts to ensure that certain provisions are specified to protect your right, conducting of due diligence, verifying the legality of the transaction, ensuring compliance with all legal documents and requirements and resolving disputes.

Each of the co-owner has a proportionate right to the whole property, including the right to use and enjoy the same. However, the act of selling or leasing the whole property generally require the consent of all co-owners.

The Law of Succession governs the property inheritance in the Philippines. In the event there was a will drafted by the decedent, the property shall be distributed according to the will’s provision, save in some cases. If there is no will, the property shall be distributed according to the law on intestate succession which specifies the heirs who will inherit.

Foreigners, in general, are not allowed to own land in the Philippines. Nevertheless, foreigners may own condominium units, provided the foreign ownership in the condominium corporation does not exceed 40%. Be that as it may, foreigners can lease land for up to 50 years, renewable for another 25 years.